Nice update this morning sparking plenty of intertest in TNT
Being a fairly large position for me I have continued to dig into this one. I am by no means an expert on Cyber security but have manged to get in contact and chat with a few people who are and the concensus feedback I got was amongst the listed plays, TNT is by far the best option.
Check out this Gov report. Cleary the think TNT has the capabilities across the board.
Pure security = TNT
Big news in the Cyber security space today with Scott Morrison in the press announcing Australia had suffered an attack.
Volume came rushing in for TNT in the morning. I topped up in my personal portfolio at 0.067. By the end of the day volume was epic and we closed right on the highs.
This bodes well for another strong open on Monday and I think this story and momentum has a long run way now, especialy with TNT offering the best listed exposure.
Also just a note for those of us who struggle to buy on big up days, take a look a the chart of this stock from Jan -Feb this year and notice how quick it shot up from 4c to 10c.
This name can really move when it gets some attention and even after todays big rise it is still on at the same price as a couple of weeks ago.
Company seems to be delivering on its promises in a field that is increasing in its relevance and value for its customers. My valuation is around where the current price is (20c). I think you buy the management and its abilty to make sensible acquisitions over anything else here, as that seems to have been critical to their growth. My question is, how big is the T.A.M for this business? Is it just local or is there international scope? If there are international opportunities they're a small fish in a very large pond so what is their sustainable USP?
Tesserent Limited (ASX: TNT) is pleased to announce that it has achieved two significant milestones.
Firstly, the previously announced FY20 financial objectives have been met:
The Company will provide a comprehensive Business Update and Commentary later this month accompanying the ASX Appendix 4C.
The Company has also signed an agreement with its existing debt provider, PURE Asset Management (PURE), for a new $15M Facility. The new Facility replaces the Company’s existing $5m loan and has been struck on improved terms of 8.9% per annum, well below the current interest rate of up to 11.5%. The funds will be drawn down as required to support earnings-accretive acquisitions (three of which are well progressed), as previously set out in TNT’s Cyber-360 Strategy. The primary terms of the debt facility are provided in the table below and include new warrants with an exercise price of 12 cents.
Geoff Lord, TNT Chairman, commented; “we’re extremely pleased to be working with PURE Asset Management who continue to support the firm’s vision and strategy. This new facility provides the funding cornerstone to continue to drive the Company’s acquisition strategy with minimal dilutionary impact on our existing shareholders”.
Nick Berry, PURE Director, commented: “We are pleased to further our support of Tesserent as it continues to add scale and capability to the business. Cyber Security is a leading agenda item for all Australian company boards, and as a trusted Australian provider to a range of government agencies and leading corporates, Tesserent is well positioned for success. Recent news flow from the Morrison Government only strengthens the likelihood of the industry continuing to deliver structural growth materially in excess of GDP”.
Mr. Challingsworth added; “securing this syndicated debt facility lead by PURE, which was significantly oversubscribed, was a result of Tesserent delivering on its FY20 financial objectives and an ability to identify high quality assets contributing to the Company’s strategy. This transaction provides capacity and certainty around the funding of future acquisitions”.
The Company looks forward to updating shareholders on the progress of new acquisitions that are currently under consideration.
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After noticing a few small cap investors and Funds all over this one, I took a look and by coincidence really like it on the chart. I respect the analysis of those I followed into this one and think it is at a nice level.
That being said I will treat this as more of a trade and if things turn down I will be getting out not topping up.
TESSERENT MAKES STRATEGIC CANBERRA-BASED ACQUISITION, STRENGTHENING FEDERAL GOVERNMENT CYBERSECURITY TIES
26-Mar-2020: Tesserent completes acquisition of north BDT
28-Apr-2020: Appendix 4C - quarterly
This is straw #1 (of 2):
QUARTERLY REVENUE EXCEEDS EXPECTATIONS
The Company is pleased to announce that its actual Q3 revenue of $8.3m exceeded its budgeted revenue of $7.4m by $900k (or 12%).
ON TARGET TO ACHIEVE A REVENUE RUN RATE OF $40M PER ANNUM BY 30 JUNE 2020
INCREASED CUSTOMER RECEIPTS AND STRONG CASH POSITION
Strong organic growth has seen the group’s customer base continue to grow to in excess of 800 customers, supported over the last three years including 15 Federal Government departments and agencies as a result of the north BDT acquisition. This has translated to significant sales wins during the quarter across key products of firewall, SIEM and security consulting. Most notably, the Company secured $3m Federal Government, multi-year contracts.
ACQUISITION OF NORTH BDT
Tesserent’s transformation to Australia's #1 ASX-listed end-to-end Cyber Security company in FY20 continues with the north BDT acquisition being completed in March 2020.
north BDT is a Canberra-based security consulting firm specialising in providing Cyber Security, digital strategy and governance, end-to-end application development to Federal Government clients. The acquisition provides the Company with the opportunity to leverage north’s existing customer relationships for cross sales into Tesserent’s cyber offerings. north BDT has a strong operating record, having delivered $8.3m revenue to 31 March 2020 and is projected to exceed $12m in their current financial year. The Company is continuing to explore additional acquisitions and will keep the market updated as these initiatives progress.
As per the Company’s COVID-19 Update to the market on 16 April 2020, the Company has recently secured new business wins of more than $5 million. This, in addition to significant existing lockedin, long-term contracts with multiple Federal Government departments and agencies and multiyear managed security services income means the Company expects minimal negative impact on its financial performance in the June quarter.
The Company’s strong cash position, new business wins and existing contracted revenue sees the business well placed to weather the current economic conditions over the short to medium term. Should this situation change, the Company will keep the market informed.
The Board and Management team are focused on continuing to build Tesserent’s position as Australia’s #1 ASX-listed Cyber Security provider by achieving several important goals over the coming months:
...click on link above for more...
See separate straw (straw #2) for "IMPACT OF VIRGIN AUSTRALIA AIRLINES (VIRGIN) PLACED IN VOLUNTARY ADMINISTRATION (VA)"
This is Straw #2 (of 2) concerning TNT's March 2020 Quarterly Report [it wouldn't fit in straw #1]
IMPACT OF VIRGIN AUSTRALIA AIRLINES (VIRGIN) PLACED IN VOLUNTARY ADMINISTRATION (VA)
Virgin is a significant customer for our leading Splunk practice, Rivium. As a result of Virgin being placed into VA, there is a potential reduction of Rivium’s FY20 revenue of up to $1.5m. This includes a limited exposure to invoices that are currently with the administrator (<$100k) the more significant impact is the work that was scheduled and or expected to be delivered in Q4 of FY20. We look forward to Virgin coming out of VA quickly and in a stronger position and look forward to working with them in the future.
The potential loss of revenue does not impact Tesserent’s expectation of $10m revenue in Q4 2020.